U.S. oil tariffs: Goldman Sachs estimates losses for foreign producers.

The 10% tariff on oil proposed by Donald Trump in the U.S. could cost foreign producers $10 billion annually. This is due to the reliance of Canadian and Latin American heavy crude oil on American refining.

This information was reported by RBK-Ukraine citing Reuters.

The agency reminded that in March, U.S. President Donald Trump plans to impose a 25% tariff on Mexican oil and a 10% tariff on Canadian oil, which is a delay from his initial proposal.

Despite this, according to predictions from investment firm Goldman, the U.S. will remain the primary destination for heavy oil, as advanced refining capabilities and low costs continue to make American refiners the most competitive buyers.

Goldman estimates that prices for light crude should rise by 50 cents per barrel to make average crude from the Middle East more appealing to Asian refiners. This is because Gulf Coast refiners in the U.S. prefer domestic light crude over imported medium crude.

According to the investment bank's estimates, American consumers will face annual tariff costs of $22 billion, while the government will generate $20 billion in revenue.

Meanwhile, Goldman noted that refiners and traders could benefit by $12 billion by linking American light crude with discounts and foreign heavy crude with premium coastal markets.

The broker indicated that Canada, the largest exporter of oil to the U.S., is likely to continue exporting 3.8 million barrels per day through pipelines. Prices will decrease to offset the impact of tariffs.

At the same time, 1.2 million barrels per day of marine imports of heavy crude from Canada and Latin American countries, including Mexico and Venezuela, will be reduced to compensate for the tariffs. This will ensure a continuous flow of oil into the United States.

Although tariffs may alter trade flows, Goldman emphasized that Canadian producers, as "captured sellers" with a limited number of alternative buyers, will have to absorb much of the tariff burden through price discounts to remain competitive in the U.S. market.

U.S. Trade War

Recall that on January 30, Donald Trump announced the introduction of tariffs on imports from Canada and Mexico. He cited the large influx of the fentanyl drug and subsidies that the U.S. provides to neighboring countries in the form of deficits as reasons.

The decision to impose tariffs on imported Canadian oil will depend on global oil prices.

However, subsequently, Trump postponed the introduction of tariffs until March. The reason was the promise of these countries' governments to strengthen security at the borders with the U.S.